Hello, and welcome to the Bunzl Results for half year ended June 30th, 2023. My name is Alex. I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press star followed by one on your telephone keypad. If you'd like to remove your question, you may press star followed by two. I'll now hand it over to your host, Frank van Zanten, CEO, to begin. Please go ahead. Good morning, and welcome to Bunzl's 2023 half year results presentation. I'm glad you could join us today. Richard Howes, our CFO, is also on the call and will take you through our financial results and discuss our outlook for the remainder of the year after my introduction. I will then review our performance in more detail, including business area results, and provide a brief update on the strategic progress we have made. Before we launch into the first half results, I want to spend a moment discussing the elements that support my confidence in the medium-term outlook of Bunzl. This continues to be driven by our proven compounding growth strategy. Firstly, our businesses remain committed to continually enhancing the value-added proposition we provide our customers, which supports our GDP plus organic revenue growth model. We continue to invest in solutions that support our offering, such as sustainability, digital, and own brand. Furthermore, a net inflationary environment will potentially supplement revenue growth. Secondly, as you will see shortly, our operating margin is substantially higher than prior to the pandemic. This is supported by the higher margin acquisitions we've made over this period and gives us confidence in the Group's operating margin remaining higher than pre-pandemic levels. Lastly, we have step-changed our acquisition spend over recent years with our strong track record continuing to supplement organic growth and supporting good returns. Our balance sheet remains very strong, providing significant opportunities for further consolidation. As I've said before, Bunzl's success over the last few years has only strengthened my confidence in our strategy and ability to continue delivering long-term returns for our stakeholders. I would also like to thank all my colleagues. It is thanks to their dedication and agility that the Bunzl business continues to perform. Turning to the main highlights of the first half. Over the period, revenue at constant exchange rates increased by 2.4%, excluding the disposal of our U.K. healthcare business in 2022. This growth was driven by acquisitions, with our resilient underlying revenue reflecting wider COVID-related normalization trends. While inflation remains a benefit, this has reduced over the period, as expected. Our operating margin increased from 7.3%- 7.4%, supported by the excellent work from our teams in managing margins, as well as increasing own brand penetration. This increase in margin is not impacted by the disposal or acquisitions over the period. As a result of our first half margin performance, we have increased our full year operating margin expectations. Strong cash generation remains a key element of our model, and we achieved 21% growth in free cash flow at actual exchange rates. Our cash generation over the period was supported by a disciplined focus across our teams on meaningfully reducing inventory, enabled by the easing of supply chain challenges. Our net debt to EBITDA is currently 1.1x, providing substantial headroom for acquisitions, and our pipeline remains active. We have made strong progress with our acquisition strategy over the period, and August year to date have announced 12 acquisitions, including two announced today, with a total committed spend of more than GBP 350 million. Lastly, we are announcing a 5.2% increase in our interim dividend per share, extending our 30 years of consecutive annual dividend growth. Overall, a very resilient performance, where we have achieved good profit growth and further delivered on our strategic objectives. I will now hand over to Richard. Thank you. Thank you, Frank. Good morning, everyone. With approximately 90% of adjusted operating profit generated outside of the U.K., our results on average were positively impacted by currency translation of between 4%-6% across the income statement. All of my comments are at constant exchange rates unless otherwise specified. Starting with revenue. Revenue grew by 0.6% to GBP 5.9 billion. Excluding the impact of our U.K. healthcare disposal, revenue grew by 2.4%. The base business contributed 1.6% to underlying growth. As we mentioned at the pre-close in June, this reflects a reducing benefit from inflation, as well as post-pandemic related normalization trends, which drove some volume weakness in the food service business in North America. This was offset by a 2% impact from the decline in COVID related sales, particularly in Q1, with limited impact in Q2. COVID-19 related sales have reduced significantly since their peak in 2020 and are now at a more typical level, although remain ahead of 2019 levels, representing a small benefit to Group revenue. Overall, underlying revenue declined by 0.4%. Acquisitions, however, contributed 2.8% to revenue growth. Now turning to the income statement. Adjusted operating profit grew by 2.5% to GBP 438 million, and by 4.1% excluding the U.K. healthcare disposal. Operating margin increased from 7.3%-7.4%, reflecting the benefit from margin management initiatives, including an increase in own brand penetration. Furthermore, the impact of operating cost inflation reduced and was more moderate than expected over the period. Our operating margin has increased from 6.6% in the first half of 2019 to 7.4% in the first half of 2023. This increase has been driven by the higher margin acquisitions we have made over the period, as well as an underlying margin increase. Net finance expenses increased by GBP 13.7 million to GBP 42.7 million. The Group continues to expect a net finance expense of GBP 90 million-GBP 95 million in 2023, given the non-repeat of the financial derivative benefits seen in 2022 and a higher interest rate on the floating portion of Group debt, which is around 30% of the total. Adjusted profit before income tax decreased by 0.8% to GBP 396 million and increased by 0.9%, excluding the disposal. The effective tax rate for the period was 25.2%, compared to 24.6% last year, reflecting the increase in the U.K. corporate tax rate. As a result of the higher tax rate and interest expenses, the adjusted earnings per share decreased by 1.7% to GBP 0.883, although excluding the impact of the disposal grew by 0.2%. Reflecting our confidence in the outlook for the Group, we are increasing the interim dividend by 5.2%. This will begin to return the Group's dividend cover to more typical levels. Moving on to the cash flow. The Group continues to generate strong free cash flow, with GBP 286 million generated over the period. This is a 21% increase at actual exchange versus the first half of the year, supported by a substantial reduction in inventory. The Group achieved cash conversion of 93%, ahead of the 86% achieved in the first half of last year. During the first half, we paid GBP 57.9 million in dividends and made a net payment of GBP 48.8 million to buy shares for our employee benefit trust, leaving total cash generation prior to investment in acquisitions of GBP 180 million. Cash outflow and acquisitions totaled GBP 95.7 million. Turning to the balance sheet, working capital decreased by GBP 7.8 million since the end of 2022, standing at GBP 1.1 billion at the end of the first half, mainly due to a decrease from currency translation being partially offset by increases from underlying working capital and acquisitions. We ended the period with just over GBP 1 billion of net debt, excluding lease liabilities. Net debt to EBITDA on a covenant basis was 1.1x, compared to 1.2x at the end of 2022. We therefore have substantial capacity to self-fund acquisitions. In addition to net debt, total deferred and contingent consideration relating to acquisitions was GBP 224 million, compared to GBP 216 million at the end of 2022. This equates to the total committed spend expected to be paid out in the period to 2028 for those acquisitions which had completed by the end of June. The balance sheet includes the deferred consideration element of this liability and the accrued portion of the contingent consideration. This totals GBP 140 million, which is broadly the same as at the end of 2022. Returns have been resilient, with return on invested capital of 14.9% and return on average operating capital of 43.2% both of which are broadly unchanged compared to the end of 2022. Returns remain well ahead of 2019 levels, supported by margin growth over this period. Now I'd like to remind you of our disciplined approach to capital allocation. Our priorities are: to invest our cash in the business to support organic growth and operational efficiencies, including investments in technology, to pay a progressive dividend, to self-fund value-accretive acquisitions, and where appropriate, distribute excess cash. Our progressive annual dividend growth policy has returned GBP 2.1 billion to shareholders since 2004, and we are committed to extending our 30-year track record of sustainable annual dividend growth. Acquisitions remain an important driver of growth within our compounding model, having been responsible for approximately 2/3s of our historical revenue growth over the last 10 years. Overall, at the end of the first half, we had committed GBP 4.9 billion to acquisitions since 2004. Our successful track record of consolidating our fragmented markets through disciplined acquisitions is demonstrated by our good return on invested capital. Our level of acquisition spend has also grown. Over the last three years, we have spent GBP 425 million per year on average. With the acquisitions we have announced today, we have already reached a total committed spend of more than GBP 350 million, ahead of the average annual spend of only a few years ago. Our acquisition pipeline remains active, and we continue to see significant opportunities to increase our presence in our existing markets, as well as the potential to expand into new markets. Furthermore, our net debt to EBITDA ratio of 1.1x means we have substantial room, headroom, to continue to invest in these opportunities as they arise. Our framework favors these first three methods of allocating capital. However, the Board is committed to an efficient balance sheet and also continually assesses the appropriateness of a return of excess capital to shareholders. Turning to our outlook for 2023, we upgrade our profit guidance, driven by a meaningful increase in operating margin expectations. We now expect Group adjusted operating profit to be moderately higher than 2022, with operating margin remaining strong and moderately higher than that achieved in the prior year. We expect Group revenue to be slightly higher than 2022, driven by announced acquisitions, partly offset by a slight organic decline following strong organic growth in recent years and a small impact from the U.K. healthcare disposal. Longer term, and as Frank mentioned earlier, acquisitions have helped us to deliver higher margins over recent years, which supports our confidence in a sustainably higher operating margin compared to pre-pandemic levels. I will now hand you over to Frank to take you through our performance in more detail. Thank you, Richard. Apologies. Let me start by discussing sector performance. The healthcare, safety, and cleaning & hygiene sectors saw a combined underlying revenue growth of 2% over the period, despite falling COVID-related sales offsetting base business growth across all these sectors. Within these sectors, we've seen our base healthcare business performing well, with the backlog of elective surgeries remaining a benefit. Our base safety business continues to improve as the supply chain disruption and labor shortages continue to ease. We expect our North America safety businesses to benefit from increased infrastructure spend in the medium term. Our base cleaning & h ygiene business grew very strongly over the period, primarily benefiting from inflation. Grocery grew 2% year-on-year, supported by further inflation benefit. Foodservice and retail combined declined by 4%. Within foodservice, this was driven by normalization of dining habits post-pandemic in North America, leading to some volume weakness caused by a decline in takeaway packaging sales, as well as customer destocking activity earlier in the period. We expect takeaway packaging sales to stabilize in the first half of 2024. In retail, strong growth in Continental Europe's base business was more than offset by a reduction in COVID-related sales and actions taken in North America to focus on stronger and more profitable retail customers. I now want to give you more detail on the drivers of our operating margin outperformance and the volume dynamics we are seeing. Firstly, we continue to benefit from the actions taken by our teams across the globe, and this has been demonstrated over the period. Our operating margin increase over the first half has benefited from very good margin management, which has included the increased penetration of higher margin own brands. Furthermore, our continued focus on strategic initiatives that drive operational efficiencies, such as investments into digital technologies and warehouse consolidation, continue to support our performance and provide a partial offset to operating cost inflation. Secondly, product cost-driven selling price inflation remained supportive to growth over the first half, although the year-on-year benefit continues to reduce. North America saw only a small benefit by the second quarter. Other regions, which had lacked North America, also continued to see reducing benefit, although inflation remained a good support in Continental Europe over the half and was strong in the U.K. and Ireland. Furthermore, following a few years of reduced activity, we saw an expected elevation in the level of customer tenders, but achieved good outcomes from these. Alongside this, operating cost inflation has also been managed well by our teams over the period, resulting in only a moderate increase overall despite the inflationary backdrop. In North America, meaningful freight cost reductions partly offset wage growth and property cost inflation. Wages in North America were closer to typical historical levels. Wage inflation in Continental Europe increased over the period, as expected, but at levels lower than previously seen in North America and was manageable. Overall, inflation dynamics have remained somewhat supportive to margins over the period. Lastly, while we've seen an impact to volumes from wider post-pandemic normalization trends, we expect these to be temporary. As well as the volume weakness in North America foodservice, which I've already mentioned, we continue to see an impact from the normalization of COVID-related product sales, particularly in the first quarter. We also saw some weakening volumes in Continental Europe, driven by reduced activity from public sector customers in France. I am confident that overall, these volume trends are predominantly short term in nature and linked to wider normalizing trends post-pandemic. Now moving on to our business area performance, which reflects the dynamics we've already discussed. The factors driving the underlying revenue decline in North America have already been covered, with the strong operating margin performance being driven by margin management initiatives, including growth in own brand penetration and more limited year-on-year operating cost inflation. In Continental Europe, the business area saw good underlying revenue growth, driven by product cost inflation, despite the impact of COVID-related product decline and some weakening volumes in France from reduced public sector activity. Operating margin declined due to hyperinflation accounting, the expected further normalization in COVID-related sales, and a change in sector mix. U.K. and Ireland performed very strongly, with underlying revenue growth being driven by product cost inflation and continued recovery in the foodservice, cleaning & h ygiene, and safety sectors. This recovery in the base business, supported by an increase in own brand penetration, greatly benefited operating margin and return on average operating capital. Excluding the impact of the U.K. healthcare disposal, adjusted operating profit increased by 31%. In the rest of the world, underlying revenue declined by 4.1% as a result of further expected COVID-related sales normalization, particularly in Asia-Pacific, which more than offset growth in both the Asia-Pacific and Latin America-based businesses. Latin America was also impacted by lower selling prices, resulting from reduced inbound freight costs and currency movements. Rest of the World's combined operating margin reflected the decrease in COVID-related sales, although margins remain well ahead of 2019. Turning now to a brief strategic update, starting with organic growth. I want to give you an example of a recent successful customer retender. This example involves us not only retaining a key facility management customer in Spain, but expanding the contract size, with this expanded relationship reflecting the growth of the customer's own business. There are four key components to our success with this retender. Firstly, the strength of our network and supply chain. We make more than 200 deliveries on average each working day to their multiple sites across Spain. Our ability to support national customers such as them has also been enhanced by two recent regional acquisitions. Furthermore, the strength of our supply chain has been demonstrated by the reliable service we've historically provided. Secondly, our own brand and digital capabilities drive stickiness, with this customer making extensive use of Bunzl's own brand. We also have the ability to host a digital platform specifically configured to the customer, and our scale means we are able to invest in technologies that drive process efficiencies. Thirdly, our commitment to reducing the impact of climate change was aligned to their own sustainability goals. We are using Bunzl's own carbon footprint tool to support them with carbon reduction through more efficient ordering patterns. We're also trialing various initiatives aimed to reduce last mile carbon emissions even further, and our quality data can support their own carbon reporting. And lastly, our general sustainability credentials were important. We have several ongoing projects to support the transition to alternative products, and our other commitments, including our diversity policy, have been highly valued in this retender. I now want to talk about operational efficiency. This is an integral part of Bunzl's DNA and a consistent focus we have across the Group. We often talk about the continued optimization of our warehouse footprint and delivery routes, with a further 12 consolidations and relocations in the first half of the year, as we continue to consolidate our warehouses into larger and more efficient spaces. However, there's also a lot happening within the warehouses. This slide highlights a good example of the kind of activity that is a consistent and daily theme in our business. We've been rolling out advanced, dedicated demand planning tools based on machine learning technologies, which unlock a range of benefits when implemented. These technology tools have supported improvements in our on time in full levels, linked to the greater levels of efficiency and accuracy we have been able to achieve with our ordering from suppliers. Furthermore, these systems are helping us to reduce our inventory and are improving our warehouse space utilization, which in turn helps to reduce the impact of property cost inflation. To give you a sense of the effectiveness of these systems, we have achieved a 5% reduction in inventory days and an improvement in product availability by using them in Bunzl Ireland warehouse, with similar results achieved elsewhere. Turning now to acquisitions. So far this year, we've made very good progress with our acquisition strategy, and earlier in the year, we passed the milestone of having announced 200 acquisitions since 2004, and our pipeline remains active. That number is now 207. As of August year to date, we have completed 12 acquisitions, including the two that we're announcing today. Our total committed spend is more than GBP 350 million. I'm very pleased that among the acquisitions we are announcing today is our first acquisition in Poland, Safety First. This is an anchor acquisition into the Polish market, which, as we mentioned in our 2021 Capital Markets Day, we have been targeting as a priority for expansion. In total, our acquisitions so far this year have been across seven countries and four sector verticals, which demonstrates the exciting breadth of opportunities we have for further consolidation and expansion. Furthermore, the majority of these acquisitions are focused on higher margin sectors, including cleaning and hygiene and safety. Through each of these acquisitions listed, we have continued to grow our customer base, enhance our capabilities, expand our product ranges, and generated opportunities to achieve synergies. Now, I would like to give you some background on the other acquisition announced today, EcoTools.nl. This is a very high double-digit margin, online specialist distributor of tool components and industrial consumables to customers in Benelux. Over the last few years, we have invested in a number of specialist digital businesses like this. Overall, they now account for around GBP 260 million of annualized revenue with a double-digit margin. These businesses are operating in especially fragmented markets, which gives them great growth potential. They are focused on targeting smaller B2B customers who require the expert advice and customer specialized customer support that they can provide. The digital specialists within these companies also contribute to the Group's overall development of its digital capabilities, generating opportunities for synergies and helping to accelerate the growth of our other businesses. Before moving on to Q&A, I want to take a moment to summarize the long-term value creation that we deliver to our very consistent compounding growth model. Organic growth has contributed approximately 1/3 of our annual revenue growth over the last 10 years. It is driven by activity in our end markets, as well as new business wins and our development of innovative products and solutions for customers. As I mentioned, I'm encouraged by our value-added solutions that support this growth driver, and believe we may see a benefit from a net inflationary environment in the medium term. Acquisitions have contributed the remaining 2/3s of our growth, driven by our position as the leading operator of scale in highly fragmented markets, with a strong balance sheet and proven track record. We've stepped up our level of acquisition spend in recent years and continue to see an active pipeline. Furthermore, supported by the higher margins of the businesses we've acquired, our operating margin is sustainably higher than it was pre-pandemic. Our strength of performance and cash generation have underpinned our unbroken 30-year dividend track record, and we are committed to extending this further. In addition, the Board will continue to assess the appropriateness of the return of excess capital to shareholders. Overall, the success of our strategic focus is demonstrated by a strong total shareholder return and the consistency of our results and growth over the long term. Bunzl today is in a very strong position, with significant opportunities for future growth, and I'm very positive about the Group's prospects. Thank you for your attention, and we're now very happy to take any questions. Thank you. As a reminder, if you'd like to ask a question, you can press star followed by one on your telephone keypad. If you'd like to remove your question, you may press star followed by two. Please ensure you're unmuted locally when asking your question. Our first question for today comes from Oscar Val Mas of JP Morgan. Your line is now open. Please go ahead. Yes, good morning, Frank and Richard. I have three questions. The first one: Could you give us a bit more detail on the level of product price inflation you're seeing in H1, and then the outlook for the second half, including if you're seeing any deflation in any product lines? That's the first question. The second question is, I guess, thinking about the upgrade to 2023 margins and how sustainable that is to 2024 and going forward, I guess the question I have there is: could you give us a sense of if any of the OpEx benefits are one-off in nature? And then the final question on organic, obviously, there's a bit of a slowdown versus what we thought a few months ago. Could you give us a sense of if that's driven by continued destocking in North America, or are there any other areas where you've seen some weakness in the last few months? Thank you. Okay. Well, I suggest I'll give some comment on the last question, and then maybe Richard can talk about the inflation upgrade information. So, yeah, on organic, we've seen a few things happening. We've seen some impact from COVID normalization, so still some reductions in COVID product sales. Although we expect, you know, COVID product sales, you know, going forward to be higher than in 2019. There's been some destocking early on, mainly in the first quarter. The foodservice, we are in the redistribution business in the U.S., and what we found is that, as you remember, over the last couple of three, three years during COVID, we've split out the real COVID products like, you know, the gloves, the masks, the sanitizers. And we've seen that there's a slightly broader effect in the foodservice redistribution business when it came to, the, the products used in the restaurants versus the takeaway packaging. So, in essence, what we've seen, in the first half, and we expect that to continue until, let's say, the, the first half next year, that the redistribution foodservice, that the takeaway packaging, has come down. What effectively means that if you, let's say during COVID and just post-COVID, when people picked up food from a restaurant or the restaurant delivered the food to the homes, let's say the spend per consumer on the packaging was slightly higher than the customer now going into the restaurant and getting a napkin, a placemat, and, you know, some toilet paper if they visit the toilet. So we see that sort of impact a little bit in North America. But that's more like a sort of a one-off COVID effect that we expect to, you know, pass by somewhere in the first half of next year. Oscar, just on your first question on the level of inflation in H1 and H2, you can assume that in the base business, so excluding the COVID products, that we saw about mid-single digit impact of inflation in the first half, the benefit of inflation in the first half. And that was, and inflation is annualizing, so it was slightly less in Q2 than it was in Q1. And we expect that trend to continue into the second half. So you can assume that in the second half we'll see there will be a contribution to growth from inflation, but it'll be lower than you saw in the first half. This is largely because we saw inflation hit us in different parts of the world at different times. The U.S. is largely getting to the point where it's largely annualized. That will happen in the second half. Both the U.K. and Continental Europe are still seeing good levels of inflation, and that will continue into the second half, albeit slightly less. To your point on deflation, we have seen some limited deflation in pockets around the Group, but it's been very manageable to this point. I don't expect that to change as we go into the second half, particularly. I mean, there might be some deflation around post that, but if there is, we feel that the impact on margins will likely to be manageable. On your second question on the sustainability of our upgrade, just to recap, we've upgraded result margins for 2023 to be moderately higher than 2022. 2022 was 7.4%, so you can expect a step on from 7.4% for the full year 2023. As to your question on how sustainable for 2024, well, look, we will—we're best to talk about that at the pre-close in December, when we'll have had been through our budgeting process. And we'll give you a much better steer for where we think the year will look. But I would say that, I think we can expect some softening in margin as we go into next year. I know the consensus is about 7.3% for next year going into today's results. I guess that goes up a little bit, but I would question if it's gonna be at the level that we're guiding to for 2023. Within that, you asked a question about sustainability of OpEx. So there's no provision releases in these numbers. We're not expecting. That's not included in any part of our guidance. We have seen some benefits from lower fuel and freight charges, particularly in North America, and that has meant that our OpEx inflation has been less impactful than we had anticipated. Maybe some of that will continue into the first half of 2024. Thanks, Richard. That was all very clear. Maybe just I'll sneak in a quick follow-on, and it's on this, I guess, sustainability of the margin. Could you just give us a comment on gross margins and how they've developed in H1? Because obviously they're probably developing a bit different to top line, when you're seeing top line organic, some organic revenue decline. So are we seeing gross profit decline as well in H1? We've seen good gross margin performance in H1, and that's driven by the margin management initiatives that Frank talked about. You know, we are seeing good penetration of own brands. I think we as a Group do buy very well. When you're the biggest customer of your biggest supplier, it does mean you're in a good position to buy well during this period. And I think that's. I do expect that to continue into the second half. But that margin, that gross margin performance should continue through the rest of 2023. Great. Thank you very much. Thank you. Our next question comes from Will Kirkness of Société Générale. Your line is now open. Please go ahead. Thanks very much. Three from me, too. Just on the margin, would you be able to isolate the organic margin improvement, either in sort of basis points or just in pounds? Secondly, just as, I guess, a follow-on to sort of the discussion around pricing, how much of the business is truly mechanical on pricing now? I had a feeling that it was gonna be less than 10%. And then the final question, just on EcoTools.nl, on that acquisition. So tool accessories and industrial consumables, that looks like quite a new area. It's very good margin. I just wondered if you could talk about the kind of outlook for doing more in that space. Thanks very much. Okay, well, let me take the last two and Richard comment on the margin. No, you're right. In terms of pricing, you know, we have been working hard to work ourselves away from the typical cost plus percentage deals. If we look, you know, globally now, we have less than 5% of our turnover is related to cost price percentage deals. And which means that, you know, we are you know, a lot more in control over, you know, over our pricing and our margins than we were, let's say, five and ten years ago. So, and that sort of supports our, you know, value-added distribution kind of approach. Now, having said that, you know, larger customers obviously follow price movements. Smaller customers, you know, that's a bit different, and that's the beauty of the Bunzl business. We are so diversified, where we have in the U.S. you know a few more larger customers. I think Continental Europe and the U.K. and Australia, our business is a lot more fragmented. So these things are you know always you know offsetting, combining each other in a nice way. So we are in a much better position there than we used to be in the past. Third one on EcoTools.nl. Yeah, EcoTools.nl is an interesting one because we've started a number of years ago with the acquisition of Disposable Discounter, you know, Hygi, Workwear Express. So, there's a number of these businesses that are, you know, very, very focused on digital, sort of have strong digital capabilities. And yeah, we are able to reach, you know, a new type of customers, slightly smaller. And what we found is that there are, let's say, prosumers, so can be larger consumers, you know, you know, professional, smaller, handyman kind of customers that like to buy, you know, products online. It's still key that they can pick up the phone, you know, and not having to press, press one, press two, press three, you never talk to a human being kind of thing. They want to talk to somebody in customer service who can tell, tell you exactly, you know, all the, the product characteristics and, you know, alternatives you have. And the beauty of these businesses is that they also contribute in our overall digital functional Groups. As you know, you know, we are now about 71%-72% of all our transactions from customers are coming in a digital way. And having these experts from these, you know, what we call speedboats, are very helpful to, you know, beef up the digital capabilities in general in Bunzl. It's not so much about the product itself, it's more about, you know, reaching a new type of customer, you know, increasing digital capabilities. And, so we can find, you know, more businesses like this, and that can be in, like, you know, safety adjacent sectors like, EcoTools.nl, or it can be, you know, in foodservice, like in digital, Disposable Discounter or Hygi is cleaning and hygiene in Germany. You know, it's all possible. You know, we have quite wide, you know, product ranges, categories, so we, we'd love to expand. And, and in that way, also, increase the levels of organic growth for Bunzl going forward. Well, on your question on margin, on margin, improvement and how much of it is organic, if your question relates to the difference between 2023 and 2019, which is about 80 basis points, I'm not gonna give you the actual amount, but you can assume that both organic and acquisitions play a meaningful part of that gap of 80 basis points. If you mean in relation to 2023 and the guidance in the improvement we've made, you can assume that a large part of that is organic. Okay. Very clear. Thanks very much. Thank you. Our next question comes from Kean Marden of Jefferies. Your line is now open. Please go ahead. Thank you. Morning, Frank. Morning, Richard. May I come back to volumes again if I can? So is the math correct that the base volumes in the second quarter were something in the region of down 4% year-on-year? And in the text, you list a number of contributing factors there. I think in your narrative, you've majored on sort of takeaway, perhaps less on destocking because you're flagging that was mainly sort of first quarter. Were things like Californian floods, exiting low-margin contracts and the French public sector also meaningful contributors to negative volumes year-on-year, in that quarter? More broadly, do you think that U.S. consumer weakness is also s tarting to influence volumes in that second quarter. Then just a couple of quick questions for Richard, if I may. I think you mentioned the provisions didn't impact EBIT in the first half. I think in the text you mentioned slow moving inventory and receivables plus five, potentially some COVID impact. I can see from the cash flow statement a tailwind, possibly a 5.7. Is that because it's not in the underlying number? Then on earn-outs, I think you've increased earn-out payment by about GBP 16.7 million in the acquisition-related items section, Richard. Does that relate to an acquisition in particular that's doing better than expected, or is this just something broader than that? Thank you. Morning, Kean. Let me start with the volumes point. Yes, you're about right. For Q2, you can assume the base business volume is around 4% down. That's about right. As to what's included within that, the majority of that will be the impact of the foodservice takeaway packaging point in North America. There are little bits around, so we have seen issues in California with the terrible weather, which meant our agricultural business lost sale, but it's quite small. We have seen some strike activity in France, which has impacted our cleaning and hygiene business, but again, in the great scheme of things, quite small. In the retail in North America, we are managing our business to reduce exposure to customers who have poorer credit quality, and as a result, looking to see where we can improve margins. But again, it's a bit small. So, take it as mainly the takeaway packaging point. But within that, I can't say we're seeing any material effect from U.S. consumer weakness at this stage. I don't know if that may come later on, but so far, we've not seen any material impact from that. On to your second question and provisions, we have seen, we disclose a net of a charge and utilization of a minus five. So, there is a, w e have utilized some provisions during the year, but there is a net charge going through, a small net charge going through as well. There's been no releases in these numbers. There actually has been a small charge, but we are utilizing the provisions that we, we have established, or some of them at least. I expect that to go, I expect that utilization to pick up and carry on into next year. On the earn-out point, that 16.7 is actually a release of an earn-out we anticipated paying this year. We haven't paid it because essentially that was in place for one acquisition who thought they were going to sell more COVID products than we thought they would sell. Unfortunately, we haven't, they haven't sold those COVID products, so as it turns out, we don't have to pay that amount. So the majority of that GBP 16.7 comes from that circumstance. Thanks, Richard. That's very helpful. Just coming back to volumes then. So if we try and interpret your sort of your narrative regarding organic revenue growth for the full year, that if I think my math is correct, and we take your product price narrative for the second half as well, then potentially we're looking at H2 volumes something in the region of minus 3% year-over-year to be consistent with your guidance for organic for the full year? I think in the base business, that'll be broadly right. I think the one thing to bear in mind is that we will start to lap the destocking we saw in North America in Q4 last year. So you can expect Q4 to be a bit better than the trend line would necessarily suggest as we start to lap the destocking we saw last year in Q4. Yeah, I agree. Thanks very much, Richard. Very helpful. Thank you. Our next question comes from Rory McKenzie of UBS. Your line is now open. Please go ahead. Good morning. It's Rory here. Just two questions, please. Firstly, we've talked about it as a theme a lot, but can you actually say where the own brand penetration is today compared to 2019? And also just update us on the margins that you think you can have achieved there compared to the broader portfolio, and also actually the inventory turns. It was good to see such a good inventory reduction in H1, when it sounds like there's been a further volume shift towards what we had thought of as a more inventory-intensive business. And then secondly, can you just talk about the retender activity you saw through H1? You've already made the point that you've been moving away from the kind of cost plus percentage margin deals, but can you talk about how clients are trying to talk to you in terms of achieving absolute cost reductions? I know that's the theme across lots of B2B retenders at the moment. Okay. All right, let me, if Richard can deal with the inventory point, I'll try to deal with the rest. So own brand, we're around the 25%, 26% of sales, and that is obviously significantly higher than, you know, pre-pandemic. So, I think there's probably another 4% or 5% added in the meantime. Obviously, the product cost inflation over that period from our branded suppliers has given us a good opportunity to offer our customers some relief in terms of giving them slightly better priced products. Let's say the margin delta, although the sales price can be a little bit lower than the branded products, the margins varies a bit between, let's say, 5%-10% difference. A good, good, good margin uplift. So, we continue to work on that. Part of the increase in own brand percentages over a longer period of time is also the impact from acquisition mix. As I always say, you know, if we continue—if we would only buy safety companies going forward, that would obviously increase the mix faster, because these businesses, certainly in the redistribution safety businesses, are almost 100%, you know, own brand. So, but, you know, it does relate to our, you know, to the added value approach, for the business to continue to work on that. Tender activities, yeah, we did say last year already that coming out of COVID, we do expect a significantly higher level of tender activities. We actually did see that also. Lots of tenders happening, but also what we've seen is that our success rate has been very good. I think our customers have seen what we have been able to do, you know, over the COVID period. Also see our sustainability credentials in terms of how we are helping the customer to move to, you know, more sustainable products, products that are better suited for a circular economy. So that's all helping to, you know, improve the stickiness of the business. And of course, you know, people are focused on cost, and you know, we are trying to, you know, help them with that also in line with the sustainability story. Try to improve the number of, reduce the number of deliveries, reduce the carbon emissions, selling them more own brands, you know, offering them good reporting on plastic or, you know, single-use plastics that avoids the taxes and stuff like that. So there's a number of areas where we can help our customers to become more effective in their business, and that's happening. So, you know, Bunzl, and that's certainly what I've been focusing on a lot since starting as CEO to make Bunzl more and more of a specialized distributor, more sticky, better margins, better portfolio, and that all adds to that picture. Rory, on inventory, yes, look, we, I mean, obviously, during COVID, we invested heavily in inventory, and I think it was one of the reasons why we did so well during that period, is that we consciously did so when others couldn't. But as the world normalizes, we absolutely needed to see a normalization in our inventory. I think the teams have done a brilliant job in getting inventory down, particularly in North America. You know, if I look at our absolute level of inventory, it's down GBP 230 million compared to the end of 2022. In the cash flow terms, we've got a cash inflow of GBP 170 million. Inventory days are in the low 60s, so which is about seven days down on the end of 2022. I still think there's a bit more to go. It's some of the reductions are will come in other regions, I think, second half and into the first half of next year. But on the whole, we're very pleased with the way that that process has gone. Yeah, thank you. And just to follow up on your point on how you see margins are sustainably higher than the pre-pandemic level due to mix changes. From what you're saying, it doesn't sound like you think inventory turns are gonna be structurally slower than the pre-pandemic level, if that makes sense. So if not, this is just a pure mix shift in kind of, you know, holding inventory and the shift to own brand, if that makes sense. Yeah, I think we broadly, right, I think you have to assume that where we have more safety businesses in the mix, most of which are imported products, that we'll hold more inventory because of those safety acquisitions. But outside of safety, I think you're right. You know, I think there's no reason why we can't get the rest of the Group down to 19 levels at some stage in the next 12-18 months. Great. That's very helpful. Thank you both. Thank you. Our next question comes from James Rose of Barclays. Your line is now open. Please go ahead. Hi there. Good morning. I've got two, please. First is coming back to margins. I think you mentioned that for FY 2024, it may be sensible to expect some softening of margins. Could you perhaps talk through that a bit more about what the moving parts are within that? And then secondly, on leverage and the balance sheet, at what level of leverage would you consider Bunzl to have excess cash? Thank you. For you, Richard. Yeah. Morning, James. Look, it's early in the year to be talking about 2024. If we do a pre-close in December for exactly for the reason to be able to more accurately and more sensibly address this. So, take my softening of margins point as a, as more of a sentiment one, rather than a one driven by, you know, our true, true feelings about our true understanding of how business will perform next year. You know, I think we've done with margins that I, I think consensus is looking at are, are agreed to be around 7.6%. That would be only 10 basis points lower than the record. So, question if that's gonna be something that we would see as continuing next year. We will update you on that later in the year. As to leverage, yes, very, very pleased to see, you know, we've spent GBP 350 million on already this year on acquisitions, and we've got. We exited June at 1.1x. I think the Board is less focused on the absolute level of leverage, but more looking at what point do they feel that taking it around we have excess cash? So, I'm not gonna put a leverage number on it, but I do, but we do recognize that we've deleveraged substantially, and that is purely because we did so well during COVID and reinvested it in very good acquisitions. We're in a very nice position as we come towards the end of the year. We would very much like to deploy more and more of that into M&A, but we'll continue to keep an eye on, on what we think is a sensible balance. Okay. Thank you. Thank you. Our next question comes from Karl Green of RBC. Your line is now open. Please go ahead. Yeah, thanks very much. Just one question from me. And just going back to your point before about, you know, it's a bit early, and you'll probably give more detail in December. But given what you can see across the world in terms of disinflationary and deflationary PPI dynamics, are you currently comfortable with the consensus organic revenue growth assumption of about 1% for 2024? Karl, I think from where we stand today, w ell, look, what do we think about, you know, we are a GDP plus business. I think there will be, so you should really, I'm sure when you're thinking about for next year, you're thinking of what GDP is gonna be in our markets. That's a little mixed at the moment, so, as we get towards the end of the year, I think we'll all have a better read on that. I think as we sit here today, the current consensus for organic feels okay, but I think we need to look at next year in the round, and we'll come back to that later in the year. Okay, thanks. Thank you. As a reminder, if you'd like to ask a question, you can press star followed by one on your telephone keypad. Our next question comes from Tom Burlton of BNP Paribas. Your line is now open. Please go ahead. Thanks. Yeah, morning, morning, Richard. Morning, Frank. Just had a couple for me. One was on the cost base and sort of outlook for sort of the various cost lines into the second half in 2024, and specifically just thinking about that property cost inflation piece. Sounds like sort of in some of the regions, wage costs at least becoming a bit more benign and getting a bit of a benefit from freight costs. But how should we be thinking about the property cost inflation piece into the second half? And should we be thinking about a similar number of renewals, or sort of when does that cost line start to annualize? Then, just on the M&A piece, as you look at the M&A pipeline as it sits today in terms of mix and where your target areas are, should we be thinking about kind of multiples within the same sort of range as history? Are there any differences in terms of mix and sort of target areas that might mean the M&A sort of conversion multiples are gonna be higher or lower than we might expect? Let me take the M&A one. So, yeah, first of all, pipeline is very active, so, you know, very pleased about. And second is, yeah, our multiples, you know, tend to be within these 6x-8x. You know, when we, when we look at larger deals, where we, where we sometimes have to compete with the private equity, they can be, they can be slightly higher. But obviously, we, we often have some synergies also. So, you know, we, we tend to then still be, you know, below the 10x, you know, for, on a, on a synergized basis. Now, PPE, PPE is not so active these days because of the problems of financing. So, you know, we may get some, you know, opportunities from, from that, over time. But, yeah, in different interest rate, you know, scenarios over the last 10, 15 years, we've always seen these multiples, you know, between 6x and 8x, simply because, for the large number of deals, given the size of the deals, Bunzl is the only gorilla in the jungle, effectively, yeah? So, we are the only ones who people talk to often. We have relationship, we build them over time, and then when people are ready to sell, for instance, post-COVID, they pick up the phone. There is a relationship, and we try to, you know, agree a fair deal. So, there's no expectations that multiples will be very different. You know, unless we go and, you know, do a more of a, you know, transformational large deal into a new sector or whatever, then, you know, we may have to do that. But in general, it's more of the same in terms of multiples to be expected. Tom, on property costs, look, you're right to point it out. We have seen quite considerable increases in property costs as we renew or relocate out of leases, which could have been, you know, can be five, 10 years old. So that mark to market is an inflationary one. It is something that we increasingly are mitigating by putting prices up where we can or looking for efficiencies. Maybe even moving out of certain states in the US to different states where it's a bit cheaper. We're doing all of that. I think it's gonna continue. I don't see any change in this for a while yet. It is worth noting that property costs are only about 10% of our OpEx, so it's not the biggest part, but it is still a bit of a headwind. On the whole, though, I actually think we've managed labor inflation really quite well in the first half, and as you point out, we've had a benefit from the fuel and freight inflation, which should be a tailwind to the second half as well. That's helpful. Thank you. Thank you. At this time, we currently have no further questions, so I'll hand back to our host, Frank van Zanten, for any further remarks. Yes, thank you all for attending our 2023 half year results presentation. I wish you all a very nice day. Thank you.